Last week, Millennial Media acquired Nexage, one of the largest mobile ad exchanges and supply-side networks, in a deal valued at over $107 million. The acquisition gives the publicly-traded mobile advertising company an owned-and-operated programmatic exchange as marketers increasingly look for the real-time, data-driven, capabilities of programmatic.
A few weeks ago (before the deal), Street Fight caught up with Matt Tengler, SVP of product at Millennial Media, to talk about the way in which location figured into the company’s strategy, the impact location data could have on the broader digital advertising marketplace, and whether small business matters (yet) in mobile advertising.
Often, location data is lumped in with a range of other data sources. Help give me a sense of the unique opportunity location affords marketers.
The opportunity we see in mobile is that more and more activities that people do are becoming digitized. Until the location-enabled smartphone, most of the real world life wasn’t digitized, but now you have people who are sharing their location, taking pictures of what they’re eating, show rooming in stores, all these things that weren’t digitized. That for us is a macro opportunity. Companies that can access that information and manufacture it into something that’s valuable for marketers are going to be successful and that’s how were trying to position our business.
In the past few months, a few folks in the mobile advertising industry have warned of a location data quality problem in mobile. Do you agree that it’s a pressing issue?
We think there is plenty of good data out there, but you have to be able to pick the signal from the noise. So it’s not just publishers faking data. The big problem we see is false precision. A publisher may know someone’s location based on an IP lookup, but then they turn that into a latitude/longitude and all of a sudden its [incorrect]. We invested a lot in picking out the good ones from the bad ones.
Most of the mobile ad companies that started with a focus on small businesses have headed upstream in search of greener pastures. Do you see small business as a valuable market for mobile advertising today?
I absolutely think it’s a big opportunity, and there are two things driving the evolution. One, I think the fact that mobile’s becoming more and more a component of people’s overall digital time is driving a need for small businesses to be a participant on the mobile side. But the other piece of that is that mobile can be, and often is, an out-of-home experience and small businesses by their nature can benefit from people who are out in the community and interacting with them. So I think there’s a good synergy there between small businesses and the mobile opportunity.
Amid the variety of consumer information that’s available today, what role does location data play in the way Millennial thinks about targeting.
Location is one part of the mix. We often combine that location signal and combine it with all the other signals we get from the ecosystem, whether it’s the apps they’re downloading, sites they’re visiting, and combine that into a better view of a user.
We think of location as the most vital mobile signal, but it’s not the only one that helps us understand our consumers. The phone is unique in that it’s in your pocket when you walk into these offline establishment. We look at location as a connective tissue that can help us bridge the digital and the real world.
How will the “location” story, which ad tech spins for brands and marketers, evolve over the next 12-16 months?
In my opinion, geo-fencing is not very interesting anymore. I think there’s a broad evolution of the market beyond the geofence story. It’s how do I use location to drive a more complete view of the consumer, and complete can be anonymously learning about their real world behaviors, because that’s what location is telling you. It’s telling you where they’re going in the real world.
I also think the notion of in-home/out-of-home is really interesting and one that location can certainly impact. With location you can have a much better understanding of the mindset of that particular consumer, and if they’re in home having a mobile experience the way you want to interact with them is probably different from if they’re out of home. I think we’re nascent there, but there will be a lot of opportunity.